Marchionne Says Alternative Vehicles Still Not Really Economical

Source: By John Lippert, Bloomberg • Posted: Tuesday, January 12, 2016

Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles NV, said he won’t lose money on a new hybrid minivan, even though such electric-drive powertrains still cost too much.

Electrified vehicles, like the plug-in hybrid minivan that will be rated at the equivalent of 80 miles per gallon, are technically possible, he said — they’re just not yet commercially viable because they’re so much more expensive than gasoline-only engines.

In 2014, Marchionne complained he was losing $14,000 on every Fiat 500E he sold in California. When asked Monday in Detroit if the plug-in minivan unveiled earlier in the day will also lose money, he said, “Hell no.”

Marchionne told reporters today at the North American International Auto Show that he’s not satisfied with the impact of the U.S. government’s plan to boost fuel economy requirements by 50 percent by 2025. He said he’s trying to make future vehicles significantly more fuel efficient than today’s models and working closely with regulators to ensure Fiat Chrysler complies with the rules.

In the meantime, he said, he’s making more efficient use of capital by earning credits that the U.S. Environmental Protection Agency makes available for green technologies that the government wants to promote. For example, in 2014, Fiat Chrysler made more use than any other automaker of credits for vehicles that run on fuel containing up to 85 percent ethanol.